Home-based entrepreneurs start their businesses with different agendas. Some dream of transforming their businesses into corporations with employees, real office space and all the works. Others are not comfortable with the idea of becoming a conglomerate that they prefer their kitchen-table business to remain as is.
Whatever goals you have as an entrepreneur, the challenge is to constantly increase the income and profits of your business. Your goal for starting a business – whether you want total self-employment, or just to spend time with your family – will affect the income of your business.
Expect the amount earned by a business run by a solo entrepreneur to be much more limited than a business with employees or hired help. Working solo limits the number of hours you can personally devote to client work, prepare your products, handle marketing, taking care of your administrative responsibilities, and other responsibilities you need to cover.
If you want to hit the million-dollar mark, you would need to rent an office, warehouse or factory outside the home. The businesses that make the most money are usually those that allow you to hire other people, make commissions on work other people do, or sell products to many people.
If you aim to build your business, here are some rules in growing your home business to bring in more income:
1. Stay focused in your business.
When their business shows the first sign of growth, some home-based entrepreneurs choose instead to branch out to a different direction rather than expand the first one. While there may be valid business opportunities that need to be seized, it is best to concentrate on the business at-hand as it moves from the start-up phase to the growth phase. Embarking on a new venture while the original business is at the throes of expansion may nip the growth in the bud. Your efforts will be diluted, your resources divided, and your time and attention will be watered down. Before you know it, you might lose your first business before your new one is even started.
2. Spend only when you really need it.
The type of business you run will dictate the kind and quality of your equipment, office supplies, facilities and inventory. Even if you have the resources for it, be cautious about spending on equipment and inventory for your expansion. Upon getting that bank loan, for example, do not rush to splurge on buying a copying machine when you do not really need it, yet. Conserve your cash and be prudent in your spending. Learn the lesson of the failed dot-coms: they burned their cash so fast as if there was no tomorrow that they are now holding the bag empty. Buy only what you need. You can also consider outsourcing or leasing new equipment instead of an outright buy.
3. Do not rush to hire permanent employees.
Hiring employees may be necessary; if you can handle the awesome responsibilities, it carries. As a start-up entrepreneur, you need to ask yourself if your business can already afford to keep employees on your payroll. Aside from your employee’s wages, your employees also expect you to provide them with benefits such as health insurance. Add to that the administrative and legal requirements that hiring an employee can become an expensive and time-consuming nightmare for the new entrepreneur. Even if you have only one employee, you will be required to collect and pay FICA taxes, pay employer social security taxes, pay federal and state unemployment taxes, maintain worker’s compensation insurance, comply with Occupational Safety and Health Administration requirements, and so on. If you must get help for your business, you can use temporary help at the start. Hire part-time students, interns or contracting the services you require. You can also use temporary workers hired through an agency. You may pay a higher fee when hiring temporary workers, but remember what you are saving by not having a “regular employee.” Avoid taking on permanent employees until you are sure you can keep them on the payroll.
4. Keep your customers happy.
You spend a significant portion of your time and resources to help bring in the customers. Once they are in the door, the trick is to keep them. There is only one way to do it: strive to provide only the best customer service at all times. It is less expensive to retain a satisfied customer than to bring in a new customer. Your business needs to put customer satisfaction as the primary goal.
Recommended Books on Growing Your Home Business
- The Six-Figure Second Income: How To Start and Grow A Successful Online Business Without Quitting Your Day Job
- Making Work at Home Work: Successfully Growing a Business and a Family under One Roof
- Getting Rich In Your Underwear: How To Start And Run A Profitable Home-Based Business
- Guerrilla Marketing, 4th edition: Easy and Inexpensive Strategies for Making Big Profits from Your Small Business
- The Enthusiastic Employee: 16 Myths on Employee and Performance Management
- Hiring and Retaining Good Employees
- Dangers of Hiring Part-Time Employees
- The Costs of Pay Scale and Employee Turnover on the Bottomline
- How to Increase Employee Performance